28 Million Americans Plan to Get a $100,000 Discount

Most Americans don't understand how the housing market works... For example, personal-finance website NerdWallet recently released the results of a survey of potential homebuyers. [Chaikin PowerFeed]( 28 Million Americans Plan to Get a $100,000 Discount By Marc Chaikin, founder, Chaikin Analytics Most Americans don't understand how the housing market works... For example, personal-finance website NerdWallet recently released the results of a survey of potential homebuyers. It showed that many folks think we're in uncharted territory... Two-thirds of the more than 2,000 survey respondents said they expect an imminent crash. And more than 60% of those folks believe current mortgage rates are "unprecedented." That's far from the case, though... In fact, the low mortgage rates in 2020 and 2021 were actually more extraordinary. Data from mortgage-loan company Freddie Mac shows that 30-year fixed-rate mortgages have averaged about 7.8% over the past 50 years. Meanwhile, the current rate is around 6%. So it's clear from the start that many people are misinformed. And it gets worse... Recommended Links: [Until Midnight Tonight, Claim a FREE Year of True Wealth Systems]( Learn how to claim one free year of the trading system that Dr. Steve Sjuggerud calls "the Swiss army knife of research systems" ($1,188 value), which booked an AVERAGE annualized gain of 40% in 2022! Plus, see where cash is going - BEFORE it gets there - for the chance to "5X"to"10X" your money multiple times as it all plays out. By midnight, [click here for full details from Steve. (Includes two free stock recommendations.)]( [This Is What I Just Told the Pentagon]( While everyone's worried about inflation, cryptocurrencies, and a looming recession, professor and forensic accountant Joel Litman just delivered an even more surprising warning when he met with top military brass at the Pentagon recently. [Here's what Joel says will happen to the market over the next 90 days](. Every month, the National Association of Realtors ("NAR") publishes a Housing Affordability Index. This index measures whether the typical American family makes enough money to qualify for a standard mortgage on a median-priced home. It assumes a 20% down payment, a 30-year fixed-rate mortgage, and that debt service won't exceed 25% of income. An index value of 100 means the median family's income matches exactly what's needed to qualify for a mortgage. Higher readings mean folks can better afford it. And lower readings mean housing is unaffordable. NAR's Housing Affordability Index fell below 100 last May for the first time since June 1990. And as you can see in the following chart, it has mostly stayed below that level since then. Here's the index from early 2010 through this past November... [Chaikin PowerFeed] Put simply, most Americans can't afford to buy a home today. It's tempting for casual observers to simply blame the Federal Reserve... After all, even if mortgage rates aren't at "unprecedented" levels, they have surged since the Fed started raising interest rates. And that does make buying a home more expensive. But many prospective buyers are missing the real problem with the housing market... You see, the "sticker prices" on homes have also risen faster than the Consumer Price Index ("CPI"). And by extension, they've risen faster than many folks' disposable incomes. In November, NAR's Housing Affordability Index fell to 95.5. That's unacceptably low. And we need to consider an important point about that calculation... It assumes a $376,700 median price and a roughly 6.8% mortgage rate. If sticker-price growth would've matched the growth in disposable incomes from December 2019 through this past November, the median price on a single-family home would've only been about $280,000. And NAR's Housing Affordability Index would've been at 130. If sticker-price growth would've matched CPI growth over that same period, the median price on a home would've been around $296,200. And NAR's Housing Affordability Index would've been at 123. It's clear that home prices are soaring. This problem is much bigger than higher interest rates. And once again, most Americans just don't understand how everything works... According to the NerdWallet survey, 28 million Americans plan to buy a home this year. And they hope to spend an average of $269,200. At that sticker price, NAR's Housing Affordability Index would be even higher. But to put it bluntly... that's a fantasy. It's more than $100,000 below the current median home price. And according to Fed data, home prices crossed this fantasyland level roughly a decade ago. Folks, there's no getting around it... We need more housing supply. And the Power Gauge recognizes the opportunity in front of us... The entire homebuilding industry currently earns a "very bullish" grade. No kidding. American consumers still want to buy homes. They're struggling because of high interest rates and high prices. But supply can – and eventually will – alleviate the sticker-price pain. And that's why the Power Gauge remains optimistic about the housing market today. Good investing, Marc Chaikin P.S. I recently shared an ideal way to play this trend with my Power Gauge Investor subscribers... In short, it's a "picks and shovels" type of opportunity. This company will benefit as homebuilders increase their supply to meet existing demand in the months ahead. The Power Gauge rates the company's stock as "very bullish" today. I believe its share price could easily surge 50% in 2023. And if all goes well, it could double by the end of next year. If you want to know all the specifics, you're in luck... I've put together a special offer for all Chaikin PowerFeed readers. It includes a free bonus year of Power Gauge Investor. [Click here for all the details](. Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +0.88% 9 16 5 S&P 500 +1.29% 170 269 61 Nasdaq +2.07% 39 49 12 Small Caps +0.72% 610 1021 258 Bonds -0.80% Energy +3.20% 3 19 1 — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Communication +6.34% Information Technology +5.56% Discretionary +1.87% Financial +1.18% Industrials +1.05% Real Estate -0.12% Health Care -0.42% Staples -0.76% Utilities -0.91% Materials -1.24% Energy -1.80% * * * * Industry Focus Regional Banking Services 70 64 10 Over the past 6 months, the Regional Banking subsector (KRE) has outperformed the S&P 500 by +0.91%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #11 of 21 subsectors and has moved up 1 slot over the past week. Top Stocks [rating] CCB Coastal Financial Co [rating] UMBF UMB Financial Corpor [rating] EFSC Enterprise Financial * * * * Top Movers Gainers [rating] SWKS +12.53% [rating] CINF +10.70% [rating] FISV +8.35% [rating] TTWO +7.85% [rating] DD +7.50% Losers [rating] INCY -4.03% [rating] CARR -3.81% [rating] PARA -2.95% [rating] TT -2.47% [rating] TAP -2.39% * * * * Earnings Report Reporting Today Rating Before Open After Close CDW, EMR, FOXA RE CVS, ETN, TRMB YUM, AVB, WYNN, STE, ORLY, MPWR, MOH, MGM, IFF, FRT, FLT, ENPH, EFX, DIS, CDAY CME D, LNC No earnings reporting today. Earnings Surprises [rating] IT Gartner, Inc. Q4 $3.70 Beat by $1.12 [rating] XYL Xylem Inc. Q4 $0.92 Beat by $0.13 [rating] RCL Royal Caribbean Cruises Ltd. Q4 $-1.12 Beat by $0.22 [rating] ENPH Enphase Energy, Inc. Q4 $1.25 Beat by $0.16 [rating] DD DuPont de Nemours, Inc. Q4 $0.89 Beat by $0.11 * * * * You have received this e-mail as part of your subscription to PowerFeed. 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